Philip Morris USA Announces Dismissal of Antitrust Lawsuit By U.S. Court of Appeals

RICHMOND, VA - The United States Court of Appeals for the Sixth Circuit today upheld a lower court’s ruling dismissing an antitrust lawsuit brought by Smith Wholesale Co., Inc. and 29 other wholesalers against Philip Morris USA.

“We are pleased that the Sixth Circuit Court of Appeals affirmed the district court’s decision and agreed with our position that the lawsuit lacked merit,” said Denise Keane, executive vice president and general counsel, Philip Morris USA. “The Wholesale Leaders program is and has been equally available to all of our wholesale customers. The court’s ruling affirmed our belief that the program complied with the antitrust laws in all respects.”

In the suit, the plaintiffs alleged the company’s program -- which gave participants the opportunity to earn higher payments based on the participant’s market share of Philip Morris USA products -- constituted illegal price discrimination and an attempt to monopolize the United States cigarette market in violation of the federal antitrust laws. The district court and now the court of appeals found instead that the program “was offered to all of PM’s direct distributors...using a nondiscriminatory formula” and that wholesalers were free to choose whether or not to participate. The court noted that “it is [the plaintiffs’ business] choices, not PM’s formula, that determine whether plaintiffs will earn PM’s higher discounts.”